Treasury management (or treasury operations) includes management of an enterprise's or government’s financial holdings. It includes activities like trading in bonds, currencies, financial derivatives and also encompasses the associated financial risk management.
All banks have departments devoted to treasury management, as do larger corporations. For non-banking entities, Treasury Management and Cash Management are sometimes used interchangeably. The treasury operations come under the control of CFO of the concern or the Vice-President / Director of Finance.
Bank Treasuries may have the following departments:
- A Fixed Income or Money Market desk that is devoted to buying and selling interest bearing securities
- A Foreign exchange or "FX" desk that buys and sells currencies
- A Capital Markets or Equities desk that deals in shares listed on the stock market. (Stock Exchanges)
In addition the Treasury function may also have a Proprietary Trading desk that conducts trading activities for the bank's own account and capital, an Asset liability management or ALM desk that manages the risk of interest rate mismatch and liquidity; and a Transfer pricing or Pooling function that prices liquidity for business lines (the liability and asset sales teams) within the bank.
Banks may or may not disclose the prices they charge for Treasury Management products.
Functions of Treasury Management includes:1. To maintain the liquidity of business
It is the main function of treasury management to maintain the liquidity of business. Without proper liquidity, it is risky for business to operate smoothly. By using cash flow analysis and working capital management. Treasury officers make good ratio of liquid assets and liquid liability.
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